How to Get Paid on Time for Your Private Investigator Services

• September 08, 2010
• by PInow Staff

Lester Burnham, Kevin Spacey's character from "American Beauty," said, "Janie's a pretty typical teenager: angry, insecure, confused. I wish I could tell her that's all going to pass, but I don't want to lie to her."

I won't lie to you either. Getting paid on time never gets any easier, no matter how long you've been in the business. And not only is it an irritating event, but it can grind your business plan to a halt if multiple clients don't pay, or if that one big job that you've worked weeks on comes up dry simply because the client "just can't pay right now. I'll catch you next month ." The seemingly obvious solution is to never perform an hour's work without an equal or greater amount of payment in advance, i.e., retainer. But a retainer is not always possible or preferable, especially when you've been hired by an attorney and he or she is paying you when they get paid.

So proactively, what can a hard-working private eye do to get the paycheck on time? Here are some suggestions:

* Don't hang your hat on that "one great case." I've fallen for this trap before. I had a case that promised to pay well over five figures on completion. It stayed at the forefront of my thoughts for weeks, as in "I'm going to pay off this and that and the other thing as soon as that check comes ." In other words, I was utterly counting my chickens before they'd hatched, and it was maddening when the little bastards refused to appear. Don't obsess over any payment, thereby making it your golden ticket to solve all your financial woes. It will most certainly become the last check in the mail and drive you insane while you wait.

* Get it in writing. From a strictly legal standpoint, just about anyone will tell you to always have a contract, and I certainly won't contradict that. Having a well-written contract is the number one way to protect your financial interests. If things get ugly, the contract may be the only ace in the hole you have. But let's be realistic. There are clients that you know, trust and have done business with over and over that have always paid on time. But these are the exception, not the rule. For everyone else, write it out and increase your chances (and your legal leverage) of getting paid on time.

* Get your money up front. As mentioned in the opening, retainer's are a beautiful thinga bird in the hand, so to speak. Make it a point to at least attempt to get some kind of retainer, if not the entire amount, to cover the hours you expect to devote to the case. If you get the money up front, you don't have to chase it later, period, which brings us to the sticky subject of how to get money from the clients that are holding out on you.

* Unionize! Well, maybe not officially, but for smaller operations here's a trick that worked for me. I had an attorney that was notorious for not paying on time to the point that everyone in town knew about himlocal PIs, process servers, paralegals, etc. Getting paid by this guy was like pulling teeth, and when you did, it was usually preceded by a dozen phone calls and several months of waiting. A few of us were getting fed up with this game, and rather than just drop the guy from our client list (he provided a lot of good cases) we made a deal amongst ourselves: When a call comes in from this particular attorney, we maintain some solidarity. For example, if he owes Mike $500 in unpaid service of process fees, I tell him I'll take that witness interview he so desperately needs as soon as Mike gets paid. The first time we pulled this maneuver, the attorney squawked and complained and threatened to take his business elsewhere. That lasted about five minutes. Mike magically got paid and the rest of us are still doing work for him. Food for thought.

* Make it obvious on your invoice. Sometimes the problem is simply one of communication. Do your invoices make your intentions clear? If it's just a bill, it will probably sit indefinitely on a pile of other bills. If it clearly states, "Payment Due Upon Receipt" or "Five Percent Penalty for Payment Received After June 1," you're more likely to be moved to the front of the line. Again, spelling this kind of information out in your contract is where it all starts, but reminding the client of what was in the contract on your invoice is good back-up.

* Court, your last resort. Personally, I save this option for extreme situations only. No one wants to be known as the litigious money-grubber who will take you to court for a $50 dispute. Always pick your battles. In Arizona, small-claims court will get you up to $2,500. The paperwork is easy, attorneys are not allowed (unless agreed to by both sides) and if your contract is concise and you did your job as promised, you are likely to get a favorable judgment. But here's the catch that a lot of well-meaning private eyes don't realize: Getting your judgment is only the first step. The judgment neither hands you a check for the amount owed, nor does it hold a gun to the head of your adversary until he or she pays up. You may still end up chasing the money through liens, bank or wage garnishments, etc., albeit with the court's stamp of approval. Do the math first and save yourself a load of grief. You could easily spend more money chasing money than you would if you had just eaten the loss from the git-go.

Napoleon Hill, the great motivational speaker, author, and advisor to President Franklin D. Roosevelt, wrote, The man who does more than he is paid for will soon be paid for more than he does. The ultimate goal should always be to provide exceptional service for a reasonable fee. But if you focus too much on the green stuff, your attention is diverted from the real purpose of the game. Treat clients as you would like to be treated, always endeavor to pay your own bills on time, and, in spite of the current economic woes, don't get caught up in excessive, stress-filled penny-pinching. Just be determined to be the best in your field and arrange your finances accordingly. That way, even if a check is occasionally late, you can ride out the dry spell, and when it does finally arrive, you will be well paid for your indispensable expertise.

Jeff Kimble is a guest writer for PInow.com. He is a licensed private investigator and co-owner of Arizona Legal Document Services LLC in Arizona.

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